First Assist RLS Blog

Friday, 26 May 2017

The general misconception of landlord is of uncaring money grubbing and self serving lot. You just have to look at how the media tend to portray us. Well we aren't all wealthy and for many landlords it is not even their main income.

With the looming changes to the tax system and landlord licencing coming to a neighborhood near you its more important than ever to look a ways to save money

With over twelve years’ experience as landlords and
developers we are fully aware of what faces landlords on a day to day basis. We
believe that we can change the way things are done by allowing you the landlord
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profits and drive down the costs of maintaining rental property.

Our mission is to ensure you peace of mind, safe in the
knowledge that we are taking care of business.

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Thursday, 18 May 2017

A Department for Housing would be created by a new Labour
government, with rent caps, three year tenancies and yet more regulation all
part of its plans for the PRS.

Labour’s election manifesto includes a raft of housing
policies which could have disastrous impacts on the PRS.

The document pledges to:

Make three year tenancies in the private rented sector
standard across the sector, with rent caps linked to inflation;

Give the Mayor of London new powers to provide additional
security for tenants in the capital given the unique pressures tenants here
face;

Introduce new legal minimum standards to ensure private
rented homes are fit for human habitation with new measures to empower tenants
to take action where their properties are not up to scratch;

Scrap the so called ‘bedroom tax’;

Reverse the decision to cut housing benefit payments for
those aged 18 to 21;

Establish a new Department for Housing;

Insulate more homes with a consultation also on preventing
‘rabbit hutch’ homes;

Implement new minimum space standards for new housing
developments; and

Draft a new national plan to address the problem of
homelessness.

RLA Chairman Alan Ward said: “While we have long argued for
housing to have a higher profile on the political agenda, a number of these
policies could have a catastrophic effect on the PRS, which is still coming to terms with tax
changes that have forced some landlords out of the market altogether.

“Rent controls do not work and only serve reduce the supply
and quality of homes to let. There is little evidence of demand for long
tenancies and the PRS is already subject to strict regulations and standards –
albeit ones that are not uniformly enforced.

“By introducing these policies Labour is in very real danger
of crashing the sector – which will do nothing to help the families and
vulnerable people renting homes that the party wants to support and protect.”

The draft proposals will be submitted to a meeting today of
members of Labour’s National Executive Committee and representatives of organisations,
such as the unions, affiliated to the Labour Party for consideration and
agreement.

Monday, 8 May 2017

The Government’s attack on small-scale buy-to-let landlords,
through a punitive tax regime and aggressive regulation, predicated on a policy
of growing a new alternative rented housing provision through large-scale
developers and institutional investors could itself be under threat.

The “Tescoisation” of what the Government has called the
“Cottage Industry” of private renting could falter if, as appears to be the
case, the uptake of the build-to-sell and build-to-rent schemes for affordable
homes is well below target.

With over 90% of private rented housing being supplied by
small-scale landlords; buy-to-letters with less than three properties, and
small company landlords with limited portfolios, it would take a huge influx of
large scale-development to make a dent in that.

A recent study (Understanding the Next Housing Crisis)
carried out by researchers at the University of Reading and presented as a
paper at the Royal Economic Society’s annual conference (April 2017) concludes
that Britain will never build enough houses to make property affordable for
young people, stating: “The increases in housing supply required to improve
affordability have to be very large and long-lasting: the step change would
need to be much larger than has ever been experienced before on a permanent
basis.”

To compound the Government’s problems, it seems that
developers have been regularly reneging on promises to build cheaper homes
alongside those being sold at full market rates. According to an investigation
by campaigners, the Sunday Times reports that: developers are “quietly walking
away from promises to build affordable homes.”

Council officials, it would seem, are being “outgunned” by
the financial and legal might of the large private developers who were granted
permission by local councils for building schemes, on condition that affordable
homes were included.

Some councils are said to be “giving-in” to demands to
change the developer’s pledges, while in other cases property companies are
said to be flouting legal agreements because of lax monitoring.

According to the Sunday Times article, in four developments
involving one developer group (a London based Housing Association) council
officials believe there has been a deliberate and unlawful scheme ongoing which
is systematically selling or renting affordable homes at full market rates,
though the housing association in question denies knowledge of any wrongdoing.

One dossier seen by the paper, submitted to the local
government ombudsman, has identified 46 developments in London where it is
claimed affordable homes may not have been provided as pledged.

The ombudsman ruled last December that there had been a
failure in monitoring the delivery of affordable homes, including the rent
levels changed. The allegations made in this dossier are the just latest
setback in the Government’s provision of more affordable homes. A 2013 study
showed that 60% of the biggest housing schemes fell well short of local
affordable housing targets including projects in Birmingham, Bristol, Cardiff,
Manchester and Sheffield.

Councils are given targets by central Government to build a
given proportion of affordable homes, which are typically in the rage of
35%-40% of new-build housing. They should be rented at lower rates or...sold in
shared ownership schemes, and it is usually a condition of planning permission
for big developments that these affordable homes are provided.

Why is it that even though the Government offers loan
guarantees and tax incentives for large scale developments for rent, there is still
a lack of enthusiasm for large-scale institutionally backed developments in the
UK?

One significant factor must be the historic importance in
the UK of owner-occupation over private renting, but the main one appears to be
that private rented sector (PRS) investment model relies more on long-term
financial gain (capital appreciation as well as rental income) rather than
short-term capital value creation from a quick sale of new-build owner-occupier
properties. The PRS model creates greater risk for institutional investors who
want certainty.

Some years ago, Mark Hafner of American PRS investor
Greystar, speaking about the UK residential property market, said: “The answer
is very simple and very obvious; the reason PRS hasn’t flourished in the UK to
date is because the for-sale market is so robust. For virtually any piece of
land you are going to achieve a higher return faster from a for-sale strategy
than you are with rental.”

The issue then is one of investment returns; it is very
important to institution investors in terms of risk. Changes in market rent
rates, or a change of government, introducing new rental tenures or rent
control, particularly with new-build PRS developments, which require a
significant investment of capital up-front, are a significant risk factor for
them.

How much of an impact large-scale institutional investment
in the PRS will have on the small-scale buy-to-let investor remains to be seen,
but it would seem that in one respect the economics of this go against the
grain of Government thinking, and could well result in the end in a policy
re-think at some point.

In the meantime it means that smaller landlords will have to
adapt to the changes in their industry, treating these as normal business
hazards, reducing costs and adapting to the new conditions as all businesses
must. Buy-to-let investments, when managed properly, still offer far better
returns than anything else available on the high street.

Thursday, 13 April 2017

Tax rises for landlords being introduced today could see
rents rise by 30% and stifle investment in properties to let, making it harder
for renters to find suitable homes.

The warnings come from the country’s leading landlord body
as the Government begins to restrict mortgage interest relief for landlords and
tax their turnover rather than their profit.

Research by the Residential Landlords Association (RLA) has shown that two-thirds of member
landlords feel they will need to increase rents to cope with the new tax
burden.

The results also show that 58 per cent of members plan on
cutting back investment in property.

Independentexpertshaveargued that
landlords will need to increase rents between 20 per cent and 30 per cent to
cope with the extra cost of the tax hikes.

Ministers have argued that the move levels the playing field
between landlords and homeowners, but the respected Institute
for Fiscal Studies has said that the tax system: “is not, and was not,
even before the recent changes, more generous to people buying to let.”

RLA Chairman, Alan Ward said: “Today’s tax increases
contradict everything the Government has said about needing a larger rented
sector to give tenants more choice and more affordable housing.

“It is tenants who will be hit hardest by these punitive tax
increases. Aside from likely paying more in rent, in many places they will face
a growing shortage of affordable places to rent.

“We call on Ministers to undertake a major review of the
impact of this policy and if all the predictions about its impact are right, to
abolish the changes in the autumn budget.”

Sunday, 20 November 2016

A week ahead of the
Autumn Statement a RLA survey revealed that a quarter of all buy-to-let
landlords are selling homes as a result of Government tax changes.

The survey of more than 1,000 landlords showed that a
quarter had either sold one of their properties or had one on the market as a
result of the Government’s plans to change Mortgage Interest Relief, to tax
them on income rather than profit.

This means many landlords on the basic rate of income tax
will find themselves pushed into a higher rate despite their income not having
increased.

It is tenants who are likely to lose out as a result of the
changes, either losing their homes as landlords sell up or facing higher rents
as landlords try to mitigate the financial impact and supply is reduced.

The RLA are making a final call for Chancellor Philip
Hammond to reverse the decision on November 23rd.David Smith, RLA policy director said: “The RLA’s
findings are a worrying sign of the potential trouble ahead for tenants as a
result of the previous Chancellor’s tax rises.

“Any reduction in supply is going to make it more difficult
for them to find a place to live and will inevitably drive rents up.

“Ahead of the Autumn Statement we are calling on the new
Chancellor to consider the evidence, reverse policy and support growth in the
rented sector.”

RLA research showed 68% of landlords said the changes will
reduce their profitability by at least 20%, and 14% said it will reduce profits
by more than 60%. A total of 36% said the removal of MIR would result in them
making a loss on their investment.

The plans, which were announced by former chancellor George
Osborne in 2015 are set to be phased from next year.

Saturday, 12 November 2016

So far, 2016 has been a year of change; Stamp Duty, Brexit,
May and Trump, to name but a few. And whether you like it or not, these changes
may have an influence on the UK’s property market.

Interestingly enough, the Brexit discussion and Trump’s
presidential campaign shared a lot of topics like free trade, immigration,
inflation, tax and healthcare.And comparing the two events, the UK’s decision to leave the
EU and Trump’s victory during the presidential election in the United States,
has already been done on multiple occasions.

We, however, prefer to ask how Trump’s win will influence
the UK’s property market?

First and foremost, to be able to find out more about
possible consequences, it’s important to view Britain’s housing market as what
it is; a small segment of the country’s macro economy.

Having defined the role property plays within the UK, it’s
easier to look at Britain’s overall economy to find indicators of future
developments. In a what-if scenario describing the relationship between Trump’s
America and post-Brexit Britain the possible outcomes received mixed reviews.

Whilst Trump has built his whole campaign on the basics of
“America First” combined with a hostile attitude towards free trade deals, he will,
nevertheless, need trade partners.

What we do know is that Trump regards the North American
Free Trade Agreement as the “worst deal ever”, opening up space for new deals
to be made.

How exactly Trump would influence the British market is
tricky to call. Broadly speaking, America’s new president is a fan of Britain.
He shared his enthusiasm about the referendum results stating it’s “a great
victory”, aims to build the finest golf course in the world in Scotland and
took Nigel Farage on his campaign tour.

Although British politicians might feel differently about
the new President-elect, with both the old and the new Prime Minister
describing Trump as “wrong”, Theresa May recently published a statement
congratulating him on the win.

Since, at this stage, we know so little about possible
effects Trump’s election may have on the UK, City A.M asked some of the biggest
investors about their reaction to the recent results.

All seven of them stated a similar point of view: knee jerk
reactions won’t get us anywhere.

On top of that, investors seem to have taken some comfort
from Donald Trump’s victory speech, giving the situation another positive
momentum.

So whilst it currently remains rather difficult to see what
influence Donald Trump’s election may have on Britain’s property market, Laith
Khalaf of financial services group Hargreaves Lansdown, probably summed up the
situation the best by describing the stock market’s reaction to Trump’s
election: “Initial stock market reaction to the Trump victory was a short
intake of breath, followed by a shrug.”